Turkey’s Efforts to Combat Money Laundering Yield Fruit as FATF Removes Country from Gray List
In a major victory for Turkey’s economic turnaround efforts, the Financial Action Task Force (FATF) has removed the country from its gray list of nations that need special monitoring in regards to money laundering and terrorist financing.
Progress Made in AML/CFT Regime
According to the FATF’s latest report, Turkey had addressed several deficiencies identified in a 2021 monitoring report. These included:
- Strengthening oversight of unregistered money transfer services
- Increasing resources dedicated to terrorist financing investigations
- Improving supervision of high-risk sectors such as banking and real estate
Vulnerabilities Addressed
Prior to its removal from the gray list, Turkey had been vulnerable to illicit financing of United Nations-sanctioned groups like the Islamic State and al-Qaeda through sectors like:
- Banking
- Construction
- Property
However, Turkey’s efforts have paid off, with the FATF concluding that it is no longer subject to increased monitoring and should continue to work with the organization to sustain its improvements.
Government Reaction
The Turkish government welcomed the news, with Finance Minister Mehmet Simsek taking to social media to declare “We did it!” alongside a Turkish flag emoji. Vice President Cevdet Yilmaz also praised the decision, stating that it will have extremely positive consequences for the financial sector and economy.
Industry Expert Analysis
According to Mohamed Daoud, industry practice lead at Moody’s:
Turkey’s removal from the Financial Action Task Force (FATF) Grey List recognizes the significant progress made by the Turkish government and various economic sectors in strengthening their fight against money laundering and terrorist financing.
Impact on Economy and Reputation
The FATF’s decision is a major vote of confidence for Turkey’s economic turnaround efforts, which have been hampered by high inflation, a depreciating local currency, and inconsistent foreign investment levels. The removal from the gray list is expected to bring significant benefits to Turkey’s financial sector and economy, and will likely be seen as a positive development by international investors.
Boost to Reputation Expected
Industry experts are predicting a boost to Turkey’s reputation internationally, which could lead to increased foreign investment and improved relationships with European and US institutions. The removal from the gray list is expected to have a positive impact on Turkey’s financial sector and economy, and will likely be seen as a major achievement for the Turkish government.